2key Network is creating a decentralized Protocol (code) that is economically viable as a self-sustaining business. Unlike a traditional business, the goal of the Protocol isn’t to hoard fiat; the 2key Protocol is designed to profit in 2KEY to subsequently burn or lock those tokens, and this action enables the Protocol to compete for market share.
To date, decentralized developments have been delivered by centralized companies that are meant to sell the tokens their profit accumulates from fees. In other cases, decentralized developments have led to projects in which a currency simply rotates within a platform or network. In both cases, there is no deflationary aspect to the token, at least not from an organic source.
With 2key, the Protocol is offering value-added services, much like any human-operated business, and it then claims fees in 2KEY. Since it is the 2key Protocol, its success, in the form of usage and demand, leads to more burns and locks of 2KEY tokens and so the Protocol constantly works to reduce the net supply of 2KEY. By targeting scarcity, the Protocol is working to grow its own value.
2key is designed to democratize the wealth generated by the internet.
2KEY tokens exist as the key means of wealth distribution within the 2key ecosystem. To truly democratize wealth creation, neither the Protocol nor the payment currency should be controllable by a centralized entity. This would typically lead to an ecosystem that is not pushing for a growth in its value, an action which is an important effort undertaken by every centralized business.
Thus, for 2key to remain attractive to those who want to grow its use, the Protocol creates a valuable token so it may remunerate successful efforts.
The Protocol integrates a number of fees which are implemented by smart contracts. These fees are reasonably applied for desirable services — the kind of services which other business charge fiat for. The value-added services offer convenience and time savings to contractors and a growth opportunity for third-party business. In return for delivering these services, 2key Protocol, which is essentially code, claims justifiable and fair fees which are subsequently used to lock and burn tokens.
With such a system, everyone in the 2key ecosystem benefits rather than the norm in which a few hands consume the advantages of a company’s profitability.
Exchange Contracts Fees are payments made for the benefit of accessing convenience and time-savings.
As has been explained in the 2KEY Token Economy article, the exchange contract offers a number of benefits to contractors. Contractors can opt for convenience and time-savings by skipping the effort exerted in acquiring utility tokens. The Exchange Contract facilitates deposits in other cryptocurrencies and automatically converts them to 2KEY token if an integrator or a referrer, who choose for payment in 2KEY, need to be paid. For this valuable service, the Exchange Contract adds a small premium on the market spread between the bid and ask prices of 2KEY.
Moderator fees are payments made for the advantage of immutability and security that 2key Protocol offers to business and referrers.
The 2key Admin Contract offers fair, secure, and trustless distribution of payments across 2key Network. Security is one of the most desirable value-adds any service can offer, and for its service, the Admin Contract charges a 2% fee on conversions.
Network Tax is a fee applied to the businesses that benefit from the incredible growth opportunity available to integrators.
Integrators are third-party businesses that offer services in the 2key ecosystem. You can learn more about integrators on one of our partnership announcement. Contractors can utilize service providers to improve the campaign conversion or offer services that must be consumed prior to conversion (like KYC); integrators charge a fee for their value-add. A 2% tariff is levied on payments made to integrators.
Importance of Cash Flow
Cash flow and profitability are necessary for the economic viability of anything that adds value.
Every project needs cash flow to grow, compete, and retain its user base. The 2key Protocol is pushing for improved liquidity and value of 2KEY tokens so it can grow and improve its market share.
A portion of the net supply of 2KEY tokens is distributed to Social Mining and Community Rewards Pool. Both of these token allocations are allotted to decentralized growth mechanisms; 2key Protocol needs to have some means of remunerating those that make the system grow. Without cash flow, it can offer them nothing as the tokens will be valueless.
The fees levied by 2key Protocol enable it to grow despite being a truly decentralized entity: it’s just code with no central entity to override it. At TGE, a portion of the token supply will be allotted to means that will ensure the market competitiveness of 2key. For these allotments to last and offer ever-desirable incentives, the Protocol works to grow token value by charging fees, like a traditional business, to Protocol and Network users brought in by a decentralized network of usage boosters, who are rewarded in 2KEY.
This is the eleventh article in 2key’s 1-Month of Content.
Article 1: 2key in 150- and 300-Word Descriptions
Article 2: 2KEY Token Economy Explained
We invite you to have a firsthand experience of our breakthrough solution — Smart Links — on our testnet (https://test.2key.io/); you can be the pioneering drive in the first feasible solution in the scramble to decentralize the web.